THE BREAKFAST BRIEFING

Since 1928 the S&P 500 has averaged a 1.02% decline in September and has been positive less than half the time, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. That makes September historically the worst-performing month of the year for the stock market.

Money managers coming back to their desks after the Labor Day weekend tend to re-evaluate their portfolios and take some money off the table. With the S&P 500 up more than 8% this year after last year’s 30% surge, and the market up 196% since the March 2009 bottom, some investors could choose to book profits and wait out the potential choppiness.

“The going could get tougher for the rest of 2014,” Tobias Levkovich, chief U.S. equity strategist at Citigroup, warned clients on Friday. He’s worried that the expected end of Federal Reserve stimulus and the increased chatter of interest-rate increases will prompt more volatility in the coming months.

Jim Paulsen, chief investment strategist at Wells Capital Management and one of the market’s biggest bulls during the past five years, is telling clients to shift money out of U.S. stocks and put cash into international equities. He’s concerned that the rare combination of increasing earnings and rising valuations means both are “becoming stretched” at the same time. That creates “elevated risk” as the market sits in record territory, he said.

“Investors should be prepared for a period of greater turbulence,” he said.

Investors face a litany of issues ahead. The geopolitical turmoil in Russia and Ukraine as well as in the Middle East always has the potential to roil markets. The European Central Bank meets Thursday, with the focus squared on whether it will start its own quantitative easing program. The monthly U.S. jobs report is due Friday; another strong report could prompt more chatter of the Fed potentially tightening policy sooner than anticipated.

The market also hasn’t had a 10% pullback in three years, an above-average streak that could make stocks ripe for such a decline.

Still, not all Septembers have been difficult for the market. Just last year, the S&P 500 gained 3% in September ahead of the two-week government shutdown. That rally also came after the stock index had fallen 3.1% in August 2013.

This time around the S&P 500 is coming off a 3.8% gain last month, its best-performing August since 2000. Such strength could make it tough for stocks to keep rallying this September.

Morning MoneyBeat Daily Factoid: On this day in 1789, the U.S. government established the Treasury Department.

STOCKS TO WATCH

Apple is in focus as buzz is building ahead of a Sept. 9 event for the maker of iPhones and iPads at which the highly anticipated iPhone 6 and possibly iWatch may be unveiled. Apple is reportedly working with a Dutch chipmaker to change how you pay for everything from pizza to shoes.

Tesla Motors hit an intraday record of $271.40 last week. The company reached an agreement with China Unicom to have charging stations in China.

iDreamSky Technology will be studied as analysts will begin publishing research on the stock following the IPO’s “quiet period.” Shares were priced at $15 last month and hit an intraday high of $22.50 last week. They closed Friday at $20.59.

MUST READS (LINKS)

Ukraine Shifts Military Focus to Defense: “Ukraine is shifting the focus of its military operation from rooting out pro-Russian rebels in the east to defending against a broader incursion by Moscow, a top official said, as talks in Minsk ended without apparent results.”

Dollar Surges to Long-Term Highs: “The U.S. dollar surged to long-term highs against the euro and yen, and many investors are betting that central banks’ divergent paths will mean further gains for the dollar.”

Fear Stirred for Hong Kong as Finance Hub: “Beijing is pressing unpopular changes to Hong Kong’s election laws that some say threaten to undermine the pillars that have made the city a commercial success at the doorstep of the world’s second-biggest economy.”

Draghi Looks Ahead to a Turbulent Time: “The ECB chief thinks the euro zone’s growth challenge is now so serious that it needs to act more like a political union, but that puts him on a collision course with Berlin.”